Opinions on Loan
We are preparing to build an addition; my wife & I are 30, the house is owned free and clear (inherited). I hate to borrow money but we really need the space. The house was appraised last year at 70K. The maximum we are willing to spend is 60K although I am going to try and hold the cost to 50K or less. Here is what is on the table so far:
1)Our credit union (my wife works there) offers a home equity loan @ 5.5% variable, 15 years (60K)
2)Credit union home equity line of credit is 6.5% fixed (15 yrs, up to 60K)
3)An aquaintance has approached me, offering to loan the money. Initially we talked about 35K/10 years for 5.5%; to do 60K/15 years he wants 7.25% fixed.
The CU will accept the appraisal we have, the private individual does not need one, he also reminds me "no points" and other cost savings. All else being equal I would go with him but the interest rate scares me off. I havn't shopped around any further. I welcome any advice!